Saturday, September 25, 2021

WorldCom’s Ebbers expected to face federal charges

Bernard Ebbers, the former chief executive officer of WorldCom Inc., will be indicted on federal fraud charges related to his former company’s US$11 billion accounting misstatement, according to news reports.

Scott D. Sullivan, former WorldCom chief financial officer, was also expected to plead guilty to fraud-related charges as early as Tuesday, according to sources close to the case cited in reports from Bloomberg, the Associated Press and other news organizations. After a hearing on Sullivan’s case, the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of New York have scheduled a press conference on a “criminal matter” for 1 p.m. Eastern Time Tuesday.

Ebbers has denied any wrongdoing. His lawyer, Reid Weingarten, wasn’t immediately available for comment.

WorldCom, which now operates under the name MCI, filed for bankruptcy in July 2002, about a month after the company disclosed that a group of former employees had altered accounting records to conceal losses and inflate earnings. The company plans to emerge from bankruptcy later this year.

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